Oil prices gain on US budget hopes, as coal set to dominateLondon (AFP) Dec 18, 2012 -
Oil prices rallied on Tuesday as hopes grew of a US deal to avert a "fiscal cliff" of tax hikes and spending cuts in the United States -- the world's biggest consumer of crude -- analysts said.

New York's main contract, light sweet crude for delivery in January, climbed 79 cents to $87.99 a barrel.

Brent North Sea crude for February jumped $1.16 to $108.80 a barrel in late London deals.

"Crude oil prices rebounded on Tuesday amid hopes about the US budget details after the meeting between US President (Barack) Obama and House Speaker John Boehner provided some optimistic signs about the US economy, showing potential for a rebound in the US oil demand," said Sucden brokers analyst Myrto Sokou.

On Monday, Obama and top Republican Boehner made strides towards a deal to avert the year-end tax and spending crisis -- the so-called fiscal cliff -- that experts warn could spark a recession.

Obama and Boehner appeared to have reached a compromise on the income level to be affected by the White House push to raise taxes on the rich.

Elsewhere on Tuesday, a report said coal was set to surpass oil as the world's top fuel within a decade, driven by growth in emerging market giants China and India, with even Europe finding it hard to cut use despite pollution concerns.

"Thanks to abundant supplies and insatiable demand for power from emerging markets, coal met nearly half of the rise in global energy demand during the first decade of the 21st century," said Maria van der Hoeven, head of the International Energy Agency.

Economic growth is expected to push up further coal's share of the global energy mix, "and if no changes are made to current policies, coal will catch oil within a decade," she said in a statement.

The latest IEA projections see coal consumption nearly matching oil consumption in four years time, rising to 4.32 billion tonnes of oil equivalent in 2017 against 4.4 billion tonnes for oil.

That has consequences for climate change as coal produces far more carbon emissions responsible for global warming than other fuels.

Australia's first carbon capture plant has entered the demonstration phase.

The $208 million Callide Oxyfuel Project is one of only a few coal-fired low emission projects in the world to move beyond concept into construction, its developers say.

While the Callide plant in Biloela, a rural area in central Queensland, was decommissioned several years ago, one 30 megawatt circuit was brought online by CS Energy specifically for the carbon capture and storage project.

Those 30 megawatts, enough to power about 30,000 homes, will test the feasibility of retrofitting other existing power stations with the technology.

"Demonstration projects such as the Callide Oxyfuel Project are essential if we are to research, develop and test such leading edge technologies for future application at a commercial scale," project director Chris Spero said in a release.

Partners for the project include the Queensland government, the Japanese government, the Australian Coal Association, Xstrata and Japan's IHI Engineering.

Australian Federal Resources Minister Martin Ferguson, who has referred to the project as one of the world's most important carbon capture and storage projects, this week announced additional government funding of $13 million to the project to extend its demonstration phase through November 2014.

Spero told the Australian Broadcasting Corp. the project is designed to catch more than 85 percent of the carbon dioxide of the flue gases or smokestack emissions being treated.

The main objective of the plant is to burn coal with pure oxygen for less waste and confine and gather the greenhouse gases rather than release them into the atmosphere.

Coal generates about three-quarters of Australia's electricity.

The Australian government's Energy White Paper, issued last month, said the country has the potential to store 417 gigatonnes of carbon dioxide, or the equivalent of 2,000 years of current Australian emissions. It projects that 26-32 percent of fossil fuel electricity generation capacity would have CCS applied to it by 2050.

Yet electricity generated by coal-fired low emission projects can be more costly.

The cost of generating power with CCS could cost $100-$150 per megawatt hour compared with current wholesale prices of about $50, Spero said in a report in The Canberra Times.

Spero said that a Japanese research organization is looking for a 200-250 megawatt plant in Australia to develop the technology further.

"Japan relies on coal for about 20 percent of its power generation, so Japan is very enthusiastic about using coal but also reducing CO2 emissions at the same time," Japanese Department of Natural Resources and Fuel Director Akira Yasui told ABC.

Wind, solar power paired with storage could be cost-effective way to power gridNewark DE (SPX) Dec 12, 2012
Renewable energy could fully power a large electric grid 99.9 percent of the time by 2030 at costs comparable to today's electricity expenses, according to new research by the University of Delaware and Delaware Technical Community College. A well-designed combination of wind power, solar power and storage in batteries and fuel cells would nearly always exceed electricity demands while keeping c ... read more

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